Correlation Between Micron Technology and G-III Apparel
Can any of the company-specific risk be diversified away by investing in both Micron Technology and G-III Apparel at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Micron Technology and G-III Apparel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and G III Apparel Group, you can compare the effects of market volatilities on Micron Technology and G-III Apparel and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Micron Technology with a short position of G-III Apparel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and G-III Apparel.
Diversification Opportunities for Micron Technology and G-III Apparel
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Micron and G-III is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and G III Apparel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G III Apparel and Micron Technology is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Micron Technology are associated (or correlated) with G-III Apparel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G III Apparel has no effect on the direction of Micron Technology i.e., Micron Technology and G-III Apparel go up and down completely randomly.
Pair Corralation between Micron Technology and G-III Apparel
Assuming the 90 days trading horizon Micron Technology is expected to generate 2.76 times more return on investment than G-III Apparel. However, Micron Technology is 2.76 times more volatile than G III Apparel Group. It trades about 0.03 of its potential returns per unit of risk. G III Apparel Group is currently generating about 0.04 per unit of risk. If you would invest 8,735 in Micron Technology on November 4, 2024 and sell it today you would earn a total of 85.00 from holding Micron Technology or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Micron Technology vs. G III Apparel Group
Performance |
| Timeline |
| Micron Technology |
| G III Apparel |
Micron Technology and G-III Apparel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and G-III Apparel
The main advantage of trading using opposite Micron Technology and G-III Apparel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, G-III Apparel can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in G-III Apparel will offset losses from the drop in G-III Apparel's long position.| Micron Technology vs. Cass Information Systems | Micron Technology vs. Teradata Corp | Micron Technology vs. Zoom Video Communications | Micron Technology vs. Highlight Communications AG |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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